Blog Archive - Alliance Housing

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Kyle Garden Square Groundbreaking

Posted on: August 16th, 2024

When: Thursday, September 5, 4:00 to 5:00 p.m.

Where: 700 Tenth Avenue South Minneapolis, MN 55415

What: Program at 4:30 p.m.; refreshments; self-guided tours

Please be our guest as we celebrate the groundbreaking of Kyle Garden Square, the transformation of a 1920s-era office building into 59 units of supportive housing for people exiting homelessness and earning very low incomes. Property residents will receive on-site supportive services from Alliance partner Touchstone Mental Health.

A brief walking tour will highlight the colorful history and evolution of the site, including its most recent use as a surgical training center for medical professionals. Join us to celebrate our partners in making this new housing resource in our community!

Questions? Please contact Jessie Hendel at 612-879-7633 or jhendel@alliancehousinginc.org

Property Tax Case Update

Posted on: June 18th, 2024

For many years, Alliance and other nonprofit owned affordable housing organizations were able to claim property tax exemption status as 501(c)(3) organizations. However, when the City of Minneapolis unexpectedly revoked this status in 2019, we found ourselves scrambling to respond. Property tax exemption provides an important reduction in expenses for Alliance, especially crucial as property operating expenses rise quickly. It allows us to keep rents affordable even without subsidies and allows our fundraising dollars to go towards paying for rent, maintenance, and staffing, as opposed to property taxes.

We’ve been fortunate to have the assistance of Faegre Drinker Biddle and Reath LLP and Larkin Hoffman in appealing this decision. Earlier this year, their hard work paid off when the issue made it all the way to the Minnesota Supreme Court. The court ruled in favor of Alliance, reinstating our property tax exemption status. This was a significant victory not just for Alliance, but for many organizations like ours.

Yet, our work was not done. Following the Supreme Court’s decision, Hennepin County pursued a legislative change that would remove property tax exemption for some nonprofit and charitable organizations providing only housing. You may have seen our outreach earlier this spring, asking you to contact your legislators to oppose this change. While we understand the importance of property taxes in providing revenue for the city, we opposed this change due to its unknown implications and the affects it would have on nonprofit housing providers who are already struggling to keep up with rising costs.

As of the end of the legislative session in late May, Hennepin County’s effort was unsuccessful. This was a relief, but we recognize that there will be continued attempts to pursue the issue. We will continue to advocate on behalf of our tenants and our ability to provide low-cost housing and hope you will join us.

Our hope is that going forward, the county will be open to discussion with nonprofit housing providers and others affected by this change to determine a solution that works for all. We believe in the power of dialogue and collaboration and hope that future discussions will lead to solutions that balance the needs of both the city with the critical role of nonprofit housing providers. Alliance Housing is committed to its mission of providing affordable housing and will continue to advocate for policies that support this goal.

A lifeline for affordable housing in Minnesota

Posted on: June 18th, 2024

Even though it’s been over a year since COVID-19 public health emergencies were lifted, the affordable housing landscape remains unstable. Inflation, skyrocketing maintenance costs, as well as increased security costs have caused major financial hardship, especially for organizations like Alliance who keep our rents low to serve those left out of market rate housing opportunities.

As highlighted by a recent Federal Reserve Bank of Minneapolis study, “Talking ‘toilets, taxes, and tenants’: Challenges mount for apartment owners in the Twin Cities area”, the costs of maintaining properties for not only nonprofits and affordable housing, but for-profit and market rate managers as well, have skyrocketed. From maintenance to taxes, insurance premiums to building security, costs have increased in nearly every corner of the industry.

In response to these ongoing struggles the Minnesota Legislature introduced a lifeline for many organizations – the Stable Housing Organization Relief Program (SHORP). This one-time $50 million grant is designed to support non-profit affordable housing owners like us who are facing rising costs on all fronts. Alliance applied for this grant last fall and were awarded funds to go towards maintaining and stabilizing our properties.

These temporary relief measures like SHORP and RentHelpMN are crucial for nonprofit housing providers to maintain stability as we move out of COVID-19 and into the “new normal”, however, in many ways they are band-aid solutions. The bigger structural issues driving these financial challenges remain unsolved. For big for-profit owners, hiking up rents hasn’t been enough to patch the holes in their cash flow. And for affordable housing providers like us, raising rents often isn’t an option as it doesn’t align with our mission of providing affordable and deeply accessible housing.

Emily, an Alliance tenant who recently graduated with a master’s degree in Healthcare Management, expressed her concerns about the potential rent increase. “A rise in rent would be a significant challenge for our household, especially as I’m starting a career in my field,” she said. Emily believes that stable rents provide the foundation for stable housing, which in turn “offers a platform for a successful life where dreams become reality.” She added, “We’re just getting by as it is, so any increase in rent could bring unwanted stress.”

We need comprehensive, lasting solutions to address the long-term challenges this sector faces. The Minneapolis Fed report drives this point home further. It notes how owners both big and small, for-profit or nonprofit, affordable or market-rate, are all struggling with these financial strains. As the report puts it: “Owners large and small, for-profit and nonprofit, affordable and market-rate, locally based and national, all face significant challenges that, if left unaddressed, could endanger the region’s housing supply.”

While Alliance is grateful for support like SHORP, these measures provide only temporary relief. We need to keep advocating for policies that truly bolster affordable housing providers for the long haul. And it’s going to take a united effort to preserve affordable housing providers in not just Minnesota but across the country.

Protect tax exemption for nonprofit-owned affordable housing

Posted on: April 24th, 2024

Over the past four years Alliance has provided updates related to our effort to maintain property tax exemption status after being denied exemption by Hennepin County in 2020. After several years of advocacy, Alliance prevailed and the Minnesota Supreme Court affirmed our exemption status according to state law. This was a win not only for Alliance, but for nonprofit-owned affordable housing across the state.

Alliance successfully brought an action in the Minnesota Tax Court to retain these exemptions. Hennepin County then appealed to the Minnesota Supreme Court, which affirmed the tax court’s decision. The Court held that the properties in question should be tax-exempt since they are owned by a 501(c)(3) nonprofit organization and rented to fulfill its charitable purpose of providing affordable housing. Hennepin County is now advocating for legislation in the Minnesota Legislature that would deny tax exemption unless “a portion of the property is permanently used by the charitable organization to provide services to the intended beneficiaries of the organization’s work.

Hennepin County is seeking legislation as part of the omnibus tax bill (SF 5234/HF 5247) that would effectively eliminate tax exemption for some nonprofit-owned affordable housing rented to low-income and formerly homeless Minnesotans.

The change proposed by Hennepin County would effectively eliminate the property tax-exempt status for nonprofit housing providers across Minnesota, many of whom serve Minnesotans facing the greatest risk of homelessness. Organizations like Alliance operate at a loss and must seek charitable donations to help pay the cost of operating these properties, as rental revenues fall well short of operating expenses.
Eliminating tax exemption for these properties would require Alliance to either seek significant additional donations or subsidies, or to raise the rents charged to tenants who are already struggling to afford housing. This would have a $100,000 annual impact on Alliance alone.

Alliance and its peers hope to work with Hennepin County to meet their shared goals of preventing homelessness and ensuring a range of housing options. Alliance supports a change to Minn. Stat. § 273.19 to clarify that individuals residing in nonprofit-owned affordable housing should not be subject to tax as a result of the property’s tax-exempt status, as they are its intended beneficiaries.

Learn more about Alliance’s position on the new legislation.

Virus Effects on Alliance Housing

Posted on: March 27th, 2020

Thank you to all of you who have reached out to ask how Alliance Housing is weathering the effects of the COVID-19 virus. The short answer is “we’re doing business nearly as normal.” Turns out it’s pretty difficult to fix a toilet or get a furnace running while working virtually. Those of us who are more office-based are still reporting to work. Property management in our world is highly paper and file intensive. Most of those things don’t exist in digital platforms. Our office is small. We have our own space and are all happy to report to work.

The real heroes are Raymond, Craig, Michael and Bob – our caretakers, maintenance and property management staff. They continue to visit tenant homes and building common space to clean, repair and collect rent. They are aware of and practice good hygiene practices. Everyone’s hands are ready to crumble off with extra hand washing. We all healthy and will not endanger tenant’s health if and when we have signs of being ill.

Our real worries are for our tenants. Forty three percent of our tenants work – primarily parttime and low wage hourly ($10-$15) jobs. Others receive social security, disability or some other sort of rent support. They will be less affected. We’re assessing the damage but know many of them have already been laid off or lost hours. We’ve always been in the business of accepting late rent payments and negotiating payment plans. Now will be no different. It just may be delayed a bit longer. Worst case scenario, if 100% of working tenants paid no rent, it amounts to about $25,000 per month. Fortunately, we can weather that for a few months.

If you want to help, we are contemplating a fund that could eventually forgive $1 of rent for each $1 of rent paid. We think this will help immensely because families will be so far behind if they are out of work for 2 or more months, it will be nearly impossible for them ever to catch up. They simply don’t earn sufficient income to ever get ahead. As foundation funds are made available or additional gifts are received from donors through June, we’ll seed and create the fund.

As always, if you have other questions or suggestions, please call or email me at 612-879-7633 or bjeanetta@alliancehousinginc.org.

Alliance is on board with Homes for All MN

Posted on: March 15th, 2018

Where we live impacts every aspect of our lives; the jobs we can access, the education our children receive and the wellbeing of our growing senior population. One’s income and history of credit, housing and convictions effects where we live further – and for some is the reason for their homelessness.

Alliance Housing is one of some 170 organizations who have banded together to ensure:

There are homes for all stages in life,
To allow workers to be more productive and businesses to thrive,
And enable students to achieve in school.

Together, with a similar message, we’ll advocate for $140 million in bonds to create supportive rental housing, preserve housing with existing federal investments, promote homeownership through community land trusts and make improvements to the state’s public housing.

It is these type of bonds that are the basis of funding for Minnehaha Commons – Alliance’s project for adults over 55 years old with a history of homelessness. While we won’t directly benefit from any new appropriation in the next year, we know from talking to people every day and for the 300 some adults and families on our “interest list” that there is a pressing need for more housing options today. It also gives us a network to continue to influence unreasonable screening criteria and get more property owners back to the business of housing people.

Learn more at www.homesforallmn.org. Follow the work on Twitter @Homes4AllMN.

Tenant Profile: Selena

Posted on: December 8th, 2015

Selena has a lot to be proud of. She works full time as a Credit Advisor at Target Corporate, making $15.50 an hour, while raising her son, Sean, who just turned two in November. She graduated from Roosevelt High School in Gary, Indiana in 2011, has a degree in cosmetology, and moved to Minneapolis in May of 2014. In June 2014, Selena came to our program when she found herself without a home. Although she had experienced homelessness as a child, this was her first time encountering homelessness as an adult. While at the shelter, Selena met Melanie, who works with our Northside Supportive Families Program, and got accepted into the program, working at both Target and the Children’s Place for $8.20 an hour.

Unhappy with the late hours and low wage, Selena left her retail jobs for a position with Wells Fargo. After being with Wells Fargo for six months, she applied for a job with Target Corporate and got accepted to the position she now has, which she loves. Making nearly double what she earned at the start of the program, Selena has been able to pay off $1,000 in debt, while budgeting money to save for a car. She is proud to have raised her credit score, and that she has enough discipline to pay off what debt she still has left. Having the past experience of raising her credit score, she is calm despite recent bumps in the road, knowing that she has the skills needed to manage her money and get back to where she wants to be. She’s also started couponing, and managing her money makes her hopeful that she’ll be sufficient on her own.

One quote Selena goes by is, “think rich, look poor.” As she describes it, “Right now, (living this way), it’s only temporary— save, reach your goals to do what you dream of. Right now you don’t have to buy all of the fancy materials, but live within your means and plan for the future. I’m thinking for the future rather than living rich now. That’s what a lot of people do, I’m trying to do the opposite.”

Although she isn’t currently using her cosmetology degree, she is working on getting licensed in Minnesota so she can have the career she dreams of. She’s proud to be saving and building a cushion of stability through her career at Target, while watching Sean grow up and become “this new person”, a sometimes bossy two year old who loves the word “mine”.

More than anything, Selena is hopeful for stability. “I hope for stability, that’s all I hope for. I just want my kid to be in a good school and for me to be able to provide for the both of us.”

Is Fair Housing Fair?

Posted on: January 7th, 2015

It depends on who you are. Fair housing laws were created in 1968 to make sure landlords treated all potential tenants the same with screening procedures, tenant selection and application fees. HUD hires people to test out fair housing laws and prosecutes those who aren’t treating applicants fairly.

I’d like to challenge the framework of fair housing rules where they are used to screen out certain classes and groups of people based on their criminal, credit and housing history. While past behavior can be a good predictor of future behavior, it doesn’t allow for life circumstances or give someone a second chance to behave differently in the future. I believe that the opportunity to get a second chance should be a cornerstone in the philosophy of all affordable housing developers and managers. We use public dollars to serve people with low incomes, and people who for one reason or another face challenges in securing stable housing, because of a disability, a history of homelessness, or simply a history of poor decisions.

Let me offer a few examples of where I don’t think fair housing is fair. Many affordable housing managers have a list of criminal issues that will screen out various types of felony offenses for a year, or five years, or ten years, or for life. These are persons who have done their time and, in many cases, their probation or parole. Nonetheless, they must continue to “serve time” by being barred from housing opportunities. Police department crime prevention units exacerbate the problem by encouraging landlords to bar former criminals from their rental property.

Let’s say you are someone with a history, ready to turn your life in the right direction. If you are lucky enough to make it past the criminal background check, a landlord will most likely review your credit and housing history. If you’ve been poor, you’ve probably not paid credit cards timely and likely had to give up an apartment because you couldn’t keep up with the rent. Most recently, we’ve seen tenants facing a Catch-22 situation. Potential landlords insist that an applicant pay off a previous landlord for rent delinquencies before they will rent to them. I am sympathetic to some extent; we all want to rent to people that will pay rent on time. But we also know that there are myriad processes, both informal and legal, that a landlord can use to terminate the lease of a tenant delinquent on rent. It should be within the scope of our mission to give someone a second chance, because it is possible to get them to voluntarily or legally move if they don’t.

Public resources to build affordable housing are scarce. Competition to be awarded them is fierce. I think most public funders want to prioritize the most needy. Yet, best practices of property management, including exclusionary tenant screening done in the name of fair housing, encourages just the opposite – excluding the most needy in favor of the least problematic.

Alliance Housing relies on relational property management and has almost no tenant screening criteria. We take referrals from homeless shelters and other social service providers. We house those other landlords screen out. We know our tenants by name, know the ups and downs of their life, and work with them to keep them stably housed. Our mantra, coined by our former Director, Herb Frey, is, “We’ll house you as long as you pay your rent (mostly on time) and behave yourself.” We believe this is our mission. If more landlords lived our mission, it would make many more housing units available without spending the money to build another unit.